Labour manifesto leaves the door 'wide open to tax rises'

Labour has been accused of leaving the door 'wide open' to painful rises in VAT and other taxes in an election manifesto that failed to explain how Gordon Brown will pay for yet another spending spree.

The independent Institute for Fiscal Studies last night issued a withering verdict on the party's blueprint for a fourth term, concluding it had left key questions on tax and spending unanswered.

As the Government was accused of running up a £22billion spending bill with its manifesto commitments, the respected IFS said the tax burden would be increased by £1,420 per family by 2014 under Labour's plans.

Blueprint: Gordon Brown and his cabinet holding copies of the Labour manifesto yesterday - but it leaves key questions on tax and spending unanswered, according to the Institute for Fiscal Studies

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The move raised fears that Labour might embrace a local income tax - supported by the LibDems - aimed at Middle England if the parties cooperate in a hung Parliament.

Mr Brown embraced Labour's Blairite past as he promised to give voters a greater voice in public services and allow the takeover of underperforming schools and hospitals.

Conceding Labour was facing 'the fight of our lives', he added: 'The future will be progressive or Conservative but it will not be both.

'We are in the future business - we are building a future fair for all.'

But as he launched his blueprint for a fourth term in Birmingham, the Prime Minister repeatedly refused to rule out a rise in VAT and insisted that Labour's looming National Insurance rise was 'necessary'.

Signalling that Labour will continue to milk higher-rate taxpayers, Mr Brown suggested the party claims only to represent those on 'middle incomes and modest incomes'.

Labour's manifesto makes no mention of the country's £1.4trillion budget deficit, using the word 'debt' only four times.

As the Daily Mail revealed yesterday, the document makes no pledge not to put up VAT rates, promising only not to 'broaden the scope' of sales tax to items such as food. Mr Brown insisted his plans were funded without the need for tax rises. But the IFS assessment drove a coach and horses through that claim.

In a hard-hitting analysis, it said: 'The party listed plenty of new things it would like to do, but was no clearer about where spending cuts would fall.'

Labour has not explained how it will fund the £1billion cost of care for the elderly, the £490million for creating 70,000 apprenticeships, or £300million for free nursery places for two-year-olds and 15 hours of free nursery education for three and four-year- olds.

Plans for a 'toddler tax credit' worth £4 a week would add £180million a year to the price tag, while transforming the Post Office into a ' People's Bank' would also be £180million.

The Tories said voters could not even trust Labour's pledge not to raise income tax, since Mr Brown broke an identical 2005 manifesto promise last week when he imposed a new 50p top rate on high earners.

The tax burden has gone up by £970 per family - £31.1billion extra this year - since 1997. With other tax rises set to kick in next April, that burden will have risen to £45.4billion, or £1,420 per family at today's prices by 2014-15.

Meanwhile, Schools Secretary Ed Balls was caught expressing dismay over Lord Mandelson's claim that Mr Blair would be 'grinning from ear to ear' at the contents of the manifesto.

What it says and what it doesn't

Analysis by James Slack

Labour's manifesto contains '50 steps to a future fair for all'. Here is our guide to what the manifesto says . . . and what it conceals:

FAMILIES

What it says: Promise of £4 a week Toddler Tax Credit from 2012 for families earning under £50,000. New fathers given right to a month's paid paternity leave - double today's level. Creation of National Care Service to provide free care at home for the elderly and disabled and cover the cost of residential care after the first two years.

Analysis: While the tax credit will cost a modest £180million a year, the Care Service will cost up to £21billion a year, the Tories say. Paternity leave, worth £125 a week, will place huge burdens on struggling employers.

NHS

What it says: Patients in England guaranteed cancer tests within a week of referral. Maximum 18-week wait for treatment after an initial GP consultation - or the right to go private. Preventative healthcare through routine 'MoT' check-ups for the over-40s. More GP surgeries open out of hours.

Analysis: Earlier cancer testing is in response to research showing survival rates in England are among the worst in Europe, including parts of the old Soviet bloc.This has been blamed on NHS failures to spot cancer and heart disease early. As a result of Labour's disastrous mishandling of GPs' contracts, family doctors now make traditional out-of-hours visits to one in 50 cases in parts of the country.

CRIME

What it says: Police to spend 80 per cent of their time on the beat visible in your neighbourhood. Chief constables can be sacked if they fail to meet standards. Victims of yobbish behaviour to receive a response within 24 hours. It claims crime is down more than a third.

Analysis: Chief constables will only be sacked if they fail repeatedly over three years. Victims of bad behaviour are still not guaranteed a police visit, and could merely be called by the local council. Violent crime recorded by the police is up by 44 per cent since 1998, even allowing for changes in counting rules. The pledge about officers spending 80 per cent of their time on the beat was banned as misleading by advertising watchdogs for including time spent in meetings.

RUBBISH

What it says: Biodegradable and recyclable materials banned from landfill. Turn Britain into a low-carbon economy in a way that is fair, secure and helps create jobs for the future. Cut UK emissions by 42 per cent in line with EU targets.

Analysis: Pay-as-you-throw taxes could mean families having five different bins - including compulsory slop buckets for food waste - and being forced to sift through rubbish for things that can be recycled, reused or converted into electricity. Householders could be fined up to £1,000 if they fail to comply with complex new rules.

EDUCATION

What it says: A choice of good schools in every area and - where parents are not satisfied - the power to bring in new school leadership teams. Good schools could take over failing neighbours. Every pupil leaving primary school to be secure in the basics, with a 3Rs guarantee of one-to-one and small group tuition for those falling behind.

Analysis: Choice is falling under Labour with top comprehensives considered more socially exclusive than grammars. Wealthy parents buy homes near the best ones. Labour's 2005 manifesto promised to 'intensify our literacy and numeracy programme', but, in exams last year, just 62 per cent of 11-year-olds achieved the expected standard or better in reading, writing and maths.

ECONOMY

What it says: Require a majority of two-thirds of shareholders in corporate takeovers. Realise stakes in publicly controlled banks to secure the best deal for the taxpayer. Northern Rock could be turned back into a building society. Introduce a global banking levy and reform banking rules to stop irresponsible behaviour. Post Office may become 'People's Bank'.

Analysis: The takeover law comes too late to save many proud British firms, such as Cadbury's, which have fallen into foreign ownership, often with little more than 50 per cent shareholder support. Gordon Brown created the regulation system that failed to stop banks taking reckless risks that took Britain into recession and led to them being bailed out with £1trillion in public funds.

DEFICIT

What it says: Support the recovery by halving our £167billion annual budget deficit. Government-controlled appointments paying over £150,000 will require ministerial clearance.

Analysis: £734billion will be borrowed by 2016, giving a national debt of £1.3-£1.4trillion. Little detail of how this mountain will be tackled. The crackdown on salaries - an idea taken from the Tories - came on the day it emerged the pay of NHS bosses has soared by almost seven per cent in a year, and 100 per cent in just over a decade. Some 25 health trust chief executives now earn more than the Prime Minister's £192,400 salary.

JOBS

What it says: Advanced apprenticeships will be radically expanded, creating up to 70,000 places. 200,000 jobs created through the Future Jobs Fund, with a job or training place for young people out of work for six months. Anyone unemployed for two years guaranteed work.

Analysis: Advanced apprenticeships could cost up to £490million a year. Labour has presided over the creation of a 'lost generation' of one-million 'Neets' - Not in Education, Employment or Training. Almost one in five school-leavers aged 16 to 24 are 'Neets'.

CONSTITUTION

What it says: Referendums on moving to 'Alternative Vote' proportional representation and a democratic, accountable, elected House of Lords. Free vote on lowering voting age to 16. Powers for public to sack cheating MPs and laws to introduce fixed-term Parliaments.

Analysis: PR, fixed-term Parliaments and a reduction in the voting age are attempts to gain LibDem support in a hung Parliament. Mr Brown promised constitutional reform - including elections to the Lords - in his first big Commons speech as Prime Minister in 2007. Practically all his reforms were shelved. Rules to stop MPs cheating expenses were diluted.

The Labour glamour girl who said: Gordon Brown must go

By Kirsty Walker

A glamorous young
activist who introduced Mr Brown to the crowd at Labour's manifesto
launch in Birmingham has previously called for him to be removed as
Prime Minister, and for the violent death of Baroness Thatcher.

Ellie Gellard has more than 3,000 followers on Twitter and includes Ed Balls, Mrs Brown and Alastair Campbell among her fans.

But the decision to ask the 20-year-old student to appear at such a high-profile event risked backfiring yesterday.

Controversial: Ellie Gellard, 20, sits with Gordon Brown and his wife Sarah before the launch of the Labour Party election manifesto yesterday

Miss Gellard - who goes under the name 'Bevanite Ellie' on her
website - last year suggested that she would like to see the elderly
Lady Thatcher fall down the stairs on a skateboard.

Discussing
the unveiling of the former Conservative Prime Minister's portrait at
Downing Street in November, she tweeted: 'Hope they're hanging it at
top of stairs, nxt 2 where some1 carelessly left tht skateboard.'

Miss
Gellard called for Mr Brown to step down as PM following Labour's
by-election defeat by the SNP at Glasgow East in July 2008.

Writing
on her 'Stilettoed Socialist' blog, she said: 'I have not heard from
him as PM speaking with passion. How dare he stand by with personal
interest watching our party sink. It is not his to lose, it is ours. In
short, Brown (although I had high hopes and don't burden you with total
responsibility) get your coat, time's up.'

Supporters of Miss
Gellard last night insisted she had not made the original comments
about Lady Thatcher, but had retweeted remarks made by another Labour
councillor Tim Cheetham.

However, the row still threatened to overshadow Labour's manifesto launch.

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General Election 2010: Labour manifesto leaves the door 'wide open to tax rises'